The Twenty-Fifth Annual General Meeting of John Master Industries Berhad - 17 September Chairman s Statement pg 9

Transcription

1 annual report 2009 The Twenty-Fifth Annual General Meeting of John Master Industries Berhad - 17 September 2009 Chairman s Statement pg 9

2 To be the leading company that enhance the lifestyles of consumers Implementing brand strategies with broad market penetration Delivering superior customer service and quality products Empowering employees and human capital development to deliver values Building resilience through professionalism and effective systems

3 COnTEnTs Group corporate structure 3 Corporate information 4 Profile of the board of directors 5 Chairman s statement 9 Corporate governance statement 16 Audit committee report 24 Statement on internal control 27 Directors report Balance sheets Income statements 36 Statement on changes in equity 37 Cash flow statements Notes to the financial statements Statement by directors 76 Statutory declaration 76 Auditors report Analysis of shareholdings List of properties 81 Notice of annual general meeting Statement accompanying notice 84 of annual general meeting Notice of Nomination of Auditors Proxy form

4 2 Attitude The corner stone of success.

5 ANNUAL REPORT JOHN MASTER INDUSTRIES BERHAD ( H) GROUP CORPORATE STRUCTURE JOHN MASTER (M) 97% SCHWARZENBACH (M) JM BUILDER JM PROPERTY MANAGEMENT JM LAND KENYAL JOHN MASTER PROPERTIES INFOSEARCH STANDPOINT VENTURES WINTER FAME APPAREL DIVISION PROPERTY DEVELOPMENT & CONSTRUCTION DIVISION DORMANT

6 4 CORPORATE INFORmATION Board of Directors Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad (Chairman) Mr Wong Cham Mew Mr Ng Bee Ken Mr Chan Foong Peng Mr Ho Yeong Fan Mr Ong Cheng Ong Cheng Hean Ms Ho Wei Choon Ms Ho Wei Ching Mr Chan Weng Kwong Audit Committee Mr Ng Bee Ken (Chairman) Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad Mr Wong Cham Mew Ms Ho Wei Choon Remuneration Committee Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad (Chairman) Mr Wong Cham Mew Mr Ng Bee Ken Nomination Committee Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad (Chairman) Mr Wong Cham Mew Mr Ng Bee Ken Secretaries Ms Chen Siew Fong Ms Koh Mei Ling Principal Bankers EON Bank Berhad Malayan Banking Berhad Stock Exchange Listing Main Market of the Bursa Malaysia Securities Berhad Registered Office No. 1, Jalan Industri PBP 13, Taman Industri Pusat Bandar Puchong, Puchong, Selangor Darul Ehsan Tel No : Fax No : Registrar Bina Management (M) Sdn. Bhd. Lot 10, The Highway Centre, Jalan 51/205, Petaling Jaya Tel No : Fax No : Auditors Messrs. Azman, Wong, Salleh & Co. Chartered Accountants 12th Floor, Wisma Tun Sambanthan, No. 2, Jalan Sultan Sulaiman, P. O. Box 12019, Kuala Lumpur

7 ANNUAL REPORT JOHN MASTER INDUSTRIES BERHAD ( H) PROFILE OF THE BOARD OF DIRECTORS TAN SRI DATUK SERI PANGLIMA DR. ABDUL RAHMAN ARSHAD PSM, SPDK, DCSM, DKSJ, DSAP, DMPN, JMN, JSM, BSK Chairman, Independent Non-Executive Director Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad, a Malaysian aged 72, was appointed to the Board on 11 December He is a graduate with a Bachelor of Arts (Honours) degree from Universiti Malaya, Diploma in Education from the University of Singapore and Diploma in Educational Administration from University of Reading, United Kingdom and Ph. D. from University of East London. He also attended the Executive Programme at Administrative Staff College, New Zealand and Advanced Management Program ( AMP ) at Harvard Graduate School of Business. He was conferred the Hon. LLD by University of Saskatchewan, Canada; Hon. D. Litt by Heriot-Watt University, Scotland; Hon. D. Litt by Universiti Putra Malaysia; Hon. D. Ed. and Ph. D. by University of East London, England and Hon. D. Educational Management by Universiti Teknologi MARA, Malaysia and Hon. D. Ed. by UCSI, Hon. D. Ed. by University of Malaya and Hon. D. Ed. from Universiti Pendidikan Sultan Idris. He ended his distinguished civil service career in November 1991 as Director General of Education, Malaysia. He was active in a number of international organisations and was an Education Consultant to the World Bank. He currently is the Chairman of Kolej Dika, Pro Chancellor of Universiti Teknologi MARA, Pro Chancellor of Universiti Pendidikan Sultan Idris and Chancellor of UCSI University. CHAN FOONG PENG Executive Director Apparel Division Mr Chan Foong Peng, a Malaysian aged 65, was appointed to the Board on 27 May Mr Chan is one of the pioneer staff of the Group having been with John Master (M) Sdn Bhd ( JMSB ) since the Company commenced operations in Prior to joining JMSB, he had over twenty (20) years of experience in both the textile and garment industry. Due to his vast experience, he is instrumental in establishing a strong marketing and distribution network throughout the country for the garments sector. He is presently responsible in overseeing the operations of the garment sector of the Group. HO YEONG FAN Executive Director Corporate & Legal Mr Ho Yeong Fan, a Malaysian aged 42, was appointed to the Board on 27 January Mr Ho is a graduate with a Bachelor of Science in Computerised Accountancy from the University of East Anglia, England. He is also an Associate Member of the Institute of Chartered Accountants of England and Wales. Mr Ho started his professional career with an international accounting firm in London, England. After returning to Malaysia, he joined a big-eight accounting firm before moving on to the Corporate Finance Department of a Merchant Bank. He subsequently joined the Company as the Corporate Manager in Mr Ho is currently in charge of the Group s Corporate and Legal matters. He is the brother of Ms Ho Wei Choon and Ms Ho Wei Ching and brother in law of Mr Ong Cheng Ong Cheng Hean. He is also the son of Mr Ho Chin Hou, a substantial shareholder of the Company.

8 6 PROFILE OF THE BOARD OF DIRECTORS ONG CHENG ONG CHENG HEAN Executive Director Property Division Mr Ong Cheng Ong Cheng Hean, a Malaysian aged 43, was appointed to the Board on 27 January Mr Ong graduated with a Bachelor of Business from Curtin University of Technology, Perth, Australia. After his graduation he worked for a number of years in the banking industry. He was the Vice President, Corporate Banking Department of a foreign bank before he left to join a property development company as General Manager in year He later set up his own property development and construction companies to undertake development projects and construction work tendering contracts mainly from government sectors. Mr Ong joined JM Land Sdn Bhd, a subsidiary of the Company in 2004 and is now heading the Property Division. He is the spouse of Ms Ho Wei Ching and the brother in law of Mr Ho Yeong Fan and Ms Ho Wei Choon. He is also the son in law of Mr Ho Chin Hou, a substantial shareholder of the Company. HO WEI CHING Executive Director Operations Ms Ho Wei Ching, a Malaysian aged 39, was appointed to the Board on 17 November Ms Ho is a graduate with a Bachelor of Business Degree. She is a member of the Malaysian Institute of Accountants and the Australian Society of Certified Practicing Accountants. She started her career as an Auditor in a Big Four accounting firm and subsequently obtained her Registered Accountant status before moving on to the commercial sector. Ms Ho joined the Group in 2004 and currently oversees the operations of the consumer division. She plays an active role in strategizing the future direction of the consumer division including brand direction, extension of product range and procurement of new retail related businesses. She is the spouse of Mr Ong Cheng Ong Cheng Hean and the sister of Ms Ho Wei Choon and Mr Ho Yeong Fan. She is also the daughter of Mr Ho Chin Hou, a substantial shareholder of the Company. WONG CHAM MEW Independent Non-Executive Director Mr Wong Cham Mew, a Malaysian aged 61, was appointed to the Board on 29 March He holds a Bachelor of Commerce Degree from University of Otago, New Zealand. He is a member of the Malaysian Institute of Accountants and is also an Approved Co-operative Society Auditor, Approved Company Auditor and Approved Company Liquidator. Mr Wong began his career in the public sector in the Income Tax Department. Later, he served as a Group Accountant and Company Secretary in the commercial sector. At present, he is a senior partner of a firm of Chartered Accountants.

9 ANNUAL REPORT JOHN MASTER INDUSTRIES BERHAD ( H) PROFILE OF THE BOARD OF DIRECTORS NG BEE KEN Independent Non-Executive Director Mr Ng Bee Ken, a Malaysian aged 54, was appointed to the Board on 27 January He holds a Bachelor of Law (Honours) from University of Wales, Cardiff, Wales and a Master of Laws from King s College, University of London. Mr Ng is also a Barrister-at-Law of Lincoln s Inn, London and an Advocate & Solicitor of the High Court of Malaya. He has been practising as a lawyer since 1986 and is presently a senior partner of a law firm. Mr Ng also holds a Master of Science (Corporate Communication) from Universiti Putra Malaysia and is an Associate of the Association of Costs and Executive Accountants, England. Mr Ng also sits on the Board of Widetech (Malaysia) Berhad. HO WEI CHOON Non Independent Non-Executive Director Ms Ho Wei Choon, a Malaysian aged 35, was appointed to the Board on 27 January Ms Ho graduated from Curtin University of Technology, Perth, Western Australia with a Double Major in Finance and Marketing. After her graduation, she joined the Group as a Sales and Marketing Executive in She then worked her way up to the position of Executive Director. Ms Ho left the Group s employ in March 2007 and was redesignated as a Non Independent Non-Executive Director. She is the sister of Mr Ho Yeong Fan and Ms Ho Wei Ching and sister in law of Mr Ong Cheng Ong Cheng Hean. She is also the daughter of Mr Ho Chin Hou, a substantial shareholder of the Company. CHAN WENG KWONG Non Independent Non-Executive Director Mr Chan Weng Kwong, a Malaysian aged 50, was appointed to the Board on 17 November Mr Chan has a certified Diploma in Accounting and Finance and a MBA (Finance) from University of Hull, United Kingdom. He is a member of the Chartered Institute of Bankers, UK, The Institute of Chartered Financial Analysts, USA, The American Association of Financial Engineers, USA, The International Who s Who of Professionals Historical Society, USA and The Chartered Hedge Funds Associate, USA. Mr Chan has a background in corporate finance, banking and property development. He had helped corporations to turnaround through debt restructuring. Presently, he is an independent financial adviser. He was active in a number of privates companies in Malaysia and internationally. Mr Chan is a director and shareholder of Strata Field Sdn Bhd, a substantial shareholder of the Company.

10 8 PROFILE OF THE BOARD OF DIRECTORS GENERAL INFORMATION Details of membership in Board Committees Directors Audit Remuneration Nomination Committee Committee Committee Tan Sri Datuk Seri Panglima Member Chairman Chairman Dr. Abdul Rahman Arshad Mr Wong Cham Mew Member Member Member Ms Ho Wei Choon Member N/A N/A Mr Ng Bee Ken Chairman Member Member Save as disclosed above, all other Directors are not members of the Board Committees. None of the Directors have had convictions for any offences other than traffic offences within the past 10 years. Save as disclosed above, none of the Directors have any family relationship with any Director and/or substantial shareholder of the Company. Save for Mr Ho Yeong Fan and Mr Ong Cheng Ong Cheng Hean ( the Affected Directors ), none of the Directors have any conflict of interest with the Company. The Affected Directors are also directors and shareholders of another company which is engaged in a similar business with JM Land Sdn Bhd ( JML ) and JM Builder Sdn Bhd ( JMB ), wholly owned subsidiaries of the Company and therefore deemed to be in contravention of Section 132(2)(e) of the Companies Act. The shareholders of JML and JMB have however ratified the said contravention in their general meetings as allowed for under Section 132(2). Save as disclosed above, none of the Directors sit on the Board of any other public listed companies.

11 ANNUAL REPORT JOHN MASTER INDUSTRIES BERHAD ( H) Chairman s Statement On behalf of the Board of Directors, I present to you the Annual Report and Audited Financial Statements of John Master Industries Berhad ( JMI or the Company ) and its subsidiaries ( the Group ) for the financial year ended 31 March Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad Chairman

12 10 ChAIRmAn s STATEmENT 2008 turned out to be an eventful year for the business community and for the general public. The financial year started with the fuel price hike that saw crude oil price shooting to US$147 per barrel. Then the US banking crisis precipate a world financial crisis that led to the crumbling of commodity prices and multiple nations economies. The financial tsunami that swept the world had shaken banking systems and people s welfare. Malaysia being largely dependent on the export market was also not spared. There was significant slow down in the economy and our economy recorded 2 quarters of consecutive contraction, technically classifying it to be in recession. Thankfully the fundamentals of the country remain sound and the financing structure intact. The government has also implemented fiscal and monetary policy that seek to pump prime the economy out of recession. Nevertheless, the days of accelerating growth will be a long way to come. The Company s two core businesses being in retail of apparel products and property development has been deeply impacted by the events that unfolded in the country and worldwide. Such a scenario has exacerbated the Company s inability to distribute dividends. Even if the economies locally and internationally recover, the returns from the current businesses of the Group will be miniscule compared with the large capital base of the Company. FINANCIAL OVERVIEW Notwithstanding the challenging economic climate, the Group recorded a turnover of RM65.5 million for the financial year ended 31 March 2009, an increase of RM2.8 million over the last financial year. The increase in revenue was primarily from the property division which had launched its Jade Terraces homes during the year. The turnover for the apparel segment is about the same as the previous year s level.

13 ANNUAL REPORT JOHN MASTER INDUSTRIES BERHAD ( H) ChAIRmAn s STATEmENT The Group reported an after tax loss of RM2.3 million for the financial year ended 31 March The losses suffered during the year was mainly due to the reversal of a freehold land measuring approximately acres which was formerly included in the disposal of 366 acres of freehold land by a subsidiary company to Jade Homes Sdn Bhd recognized in the financial statements during the financial year ended 31 March 2007 ( Reversal of Lot 5727 ), further details of which are provided under Note 37 of the financial statements. The Reversal of Lot 5727 resulted in a loss of RM6.9 million to the Group for the current financial year. BUSINESS OPERATIONS REVIEW Apparel Segment The apparel sector was turning in healthy numbers right up to end 2008, after which the effects of the sub prime crisis in the US started filtering in to the domestic economy. The eroding consumer confidence was reflected in our dwindling sales figures for the fourth quarter of our financial year ended 31 March With the many pre-emptive measures taken by the Group, we had managed to maintain our apparel sales at about last year s level. EBIT for the apparel segment had however improved from RM4.6 million last year to RM5.4 million this year, reflecting the fruits of our cost cutting and profit enhancement strategies which were implemented since Property Development and Construction Segment During the financial year under review, the 220 units at Kajang was fully completed with CF. Revenue from the property development and construction segment recorded an increase in revenue from RM1.25 million in the previous year to RM3.8 million in the current year. The increase in revenue was attributable to the official launch of the Jade Terraces homes during the third quarter of the financial year. Due to the softening property market sentiments, sales of the Jade Terraces homes was not as robust as we had hoped. There remain sizeable quantity of completed stocks houses for sale. The property development and construction segment registered a loss, mainly due to the Reversal of Lot 5727.